SINGAPORE (Feb 23): IHH Healthcare Berhad has declared a loss of RM42.5 million ($13.5 million) as compared to RM415.8 million in earnings a year ago, led by foreign exchange losses on borrowings as well as fair value losses.

As such, the group’s FY16 earnings fell 34% to RM612.4 million from RM933.9 million a year ago in FY15.

During the quarter, Acibadem Holdings recognised exchange losses arising from the translation of its non-Turkish Lira (TL) denominated borrowings/payables net of its non-TL denominated cash/receivables as finance income or finance cost respectively.

The group consequently recognised RM244.6 million exchange losses on translation of non-Turkish Lira (TL) balances in 4Q16, as compared to an exchange gain of RM121.3 million in 4Q15.

Additionally, IHH recognised RM37.5 million of fair value losses from the valuation of its compulsory convertible preference shares (CCPS) and call option in 4Q16, as compared to its RM0.9 million net fair value gain in the previous year.

Revenue for the quarter grew 15% to RM$2.6 billion from RM$2.3 billion in 4Q15, attributed to organic growth of most of its existing operations as well as the ramp up of operations at Gleneagles Kota Kinabalu Hospital, Acibadem Taksim Hospital and Gleneagles Medini Hospital.

The group’s acquisitions of Global Hospitals, Tokuda Group and City Clinic Group also contributed to the increase in revenue during 4Q16.

Group EBITDA, however, decreased 8% due to lower revaluation gains, higher doubtful expenses, start-up losses from the new hospitals, as well as higher operating and staff costs, in addition to pre-opening expenses incurred to prepare Gleneagles Hong Kong for its opening next year.

This was partially offset by the group’s RM13.1 million gain on divestment of Parkway Life REIT’s investment properties in 4Q.

Other operating income decreased as a result of lower valuation gain recognised on investment properties in 4Q16 of RM30.2 million as compared to RM120.9 million in Q415.

Excluding the effects of foreign exchange on net borrowings and fair valuation of CCPS, net financing costs of the group had increased on a year-to-date basis. This is as a result of higher borrowing taken and more cash being utilised for working capital, capital expenditure, acquisitions and purchase of investment properties.

IHH has recommended a first and final single-tier cash dividend of 3 sens per ordinary share for FY16.

“In the year, we executed well on existing operations and divested non-core assets to focus on our strengths. We have also successfully recalibrated our strategy in India to become a leading healthcare provider there, making it our fourth home market,” comments IHH’s managing director and CEO, Tan See Leng.

“In the year, we executed well on existing operations and divested non-core assets to focus on our strengths. We have also successfully recalibrated our strategy in India to become a leading healthcare provider there, making it our fourth home market,” he adds.

Shares of IHH closed 1 cent lower at $1.96 on Thursday before the release of results.

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